October volumes were up 11% year over year despite disruptions like the dockworker strike at U.S. East and Gulf Coast ports.
October air cargo demand remained healthy, up 11% year over year, despite a flow of frequent and diverse disruptions throughout the year, according to an Oct. 31 report from Xeneta.
Last month’s market stability “shows the prep work has paid off as well as the flexibility shown in the industry,” said Chief Airfreight Officer Niall van de Wouw. “We see more emphasis on maintaining relationships than squeezing every last dime of revenue.”
Not even zero growth over the next two months can disrupt the air freight market from unexpected double-digit demand upswing in 2024, van de Wouw said.
October Air Freight By The Numbers
Previously, Xeneta noted that October was expected to be a “whole new ballgame” due to various conflicts like the 3-day strike at U.S. ports. However, last month’s volumes reflected the “growing maturity and balance among buyers and sellers of air cargo capacity,” Xeneta reported.
“What we are seeing in the air cargo market is a compliment to the increasing ability of shippers, freight forwarders, and airlines to manage disruptions and process these kinds of volumes without as much drama around spiralling rates,” said van de Wouw. “Over the long-term, this is better for everybody.”
On a corridor level, spot rates from Northeast Asia to North America stayed flat month over month, partly due to a leveling activity following weather disruptions and China’s Golden Week holidays, Xeneta reported.
“There is a maturity in the market which stems from airlines being better prepared this year as well as there being clearer rules in place between shippers and forwarders, and forwarders and airlines. This is good for relationships – and good for consumers,” said van de Wouw.
He added that rates are still elevated YoY, but are still relatively stable and not “crazy” despite strong demand, a rising load factor, and only a small increase in supply.
“Lessons have been learned and people are looking for healthy, reasonable rates on both sides,” he said.
Meanwhile, rates from Europe to North America saw the largest month-over-month increase of 11%, with the return leg up 10% MoM. Xeneta attributed the increases to precautionary measures taken by shippers and forwarders to lessen the impact of the dockworker strike at U.S. East and Gulf Coast ports.
Experts previously told Supply Chain Dive that air freight demand was returning to seasonally-adjusted norms despite the 3-day work stoppage. Since the potential for a strike was widely publicized, several companies took early action to avoid logistics challenges. Many shippers shifted ocean freight to air transport, while they waited to see how long the strike would last.
Xeneta reported the cargo diversions resulted in higher air cargo volumes in October. However, a “quicker-than-expected” resolution to the issue saw elevated volumes peak in the week ending Oct. 20, then begin to erode. However, air cargo rates are expected to continue rising, as winter schedules for passenger flights cause cargo capacity to fall.
Van de Wouw said that the next level of “market maturity” will be shippers and forwarders navigating rate adjustments throughout the duration of contracts.
“Indexing will benefit all parties and create confidence to enter long-term contracts. It is a natural next step in a market that is clearly seeing greater balance from better preparedness,” van de Wouw said.
Source: https://www.supplychaindive.com/news/xeneta-air-cargo-demand-port-strike-2024-october/732091/
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